The present invention relates to the field of credit card systems and, in particular, discloses a credit security system whereby the total available credit attributed a card and its user is divided into smaller sums, each of which may be used only for specific purposes and to which the user may assign specific sub-account balances for Internet and telephone transactions.
Credit cards have been popular for many years. Users most commonly are issued a card embossed with a numerical identification as well as a magnetic strip, which they present to sellers in lieu of cash for payment. The transactions are then authorized by a remote clearing house, which allows spending up to the user's credit limit. Following authorization, the amount of the transaction is then recorded in the user's account, and a new available credit is computed as a basis of authorization for subsequent transactions. Credit providers charge both fixed annual rates, as well as interest rates on balances which they carry for their customers.
The prior art has disclosed inventions which facilitate the use of these cards and the verification of a user's credit for transaction authorization. One system which facilitates use of credit cards is shown in U.S. Pat. No. 4,700,055. This patent discloses a system which enables a user to carry a single card that may be used for multiple accounts and credit providers. The pertinent information for each account is stored on the card magnetically with a semiconductor device or by any alternative recording means.
U.S. Pat. No. 5,440,108 discloses a system which facilitates the use of credit cards in a cash card format. This cash card dispensing and revaluing system consists of a payment apparatus which receives and validates payment in conjunction with a cash card. The system also may dispense cash cards upon consumer request and payment of a predetermined amount.
A credit verification system is disclosed in U.S. Pat. No. 3,624,626. The system employs a remotely located computer and a local microprocessor communicating via telephone lines in order to retrieve information regarding validity of the credit card.
The use of credit in worldwide commerce has grown steadily over the past 30 years. Invigorating that growth has been the development and expansion of the Internet and the associated explosion of online commerce. Online wholesalers and resellers produce sales catalogs and interactive shopping tools for use by those with access to the World Wide Web. Potential purchasers may be connected to these sellers of goods and services through advertisements which may list a web address, or through a hyperlink, typically found while “surfing” the web, that directs. the appropriate web browser directly to the seller's site. Alternatively, buyers who are actively searching for a seller may employ one of the many Internet searching tools (Yahoo!, Excite, Webcrawler, etc.), which list web sites based on how nearly they match search terms provided by the user.
U.S. Pat. No. 5,727,163 discloses a method for communicating credit card data on a non-secure network. This method requires the customer who is placing an order to provide only a subset of the credit card account number to which the order is to be charged. The order is transmitted over the Internet to the purchaser's location. During a subsequent telephone call to the merchant, the customer enters the complete credit card account number, preferably on a touch tone key pad.
Another credit system developed specifically to facilitate online commerce is disclosed in U.S. Pat. No. 5,883,810. This system relies on a “card” which is issued electronically to a customer by the issuing institution. When a customer desires to make an online transaction, the customer requests a transaction number from the issuing institution for that single transaction. The transaction number is then submitted to the online seller as if it were a credit card number. When the merchant submits the transaction number for authorization, the issuing institution recognizes the number as a transaction number for an online commerce card.
While all of the patents described above provide useful methods for facilitating credit card use, the present invention provides both a unique and superior method of credit card security which will find broad application in online commerce. Credit cards provide convenient purchasing power to millions of people throughout the world; however, the method through which credit cards are used (transmission and verification of credit card numbers) makes the misuse and transaction of wrongful purchases common. If a card is lost or stolen, a person who is not authorized to use that card is able to conduct transactions until either the credit limit of the card holder is reached (which is most commonly in the thousands of dollars) or the card holder has contacted the credit providing institution and the card has been canceled.
When credit card accounts are employed in online commerce, the exposure to false transactions may be even greater. Credit card account numbers may be misappropriated during their transmission to and from the merchant. In this case, the card holder will have no knowledge that the card number has been taken or that any fraudulent purchases were made for until his or her statement is received or a subsequent purchase has been denied due to the credit limit being reached, because the entire balance of the card holder's credit limit may be applied toward any purchase.
Despite these drawbacks, credit cards are the preferred payment method for online commerce. Sellers of goods and services online may have purchasers input their personal and credit card information into an internet browser based “Form”. When the form is completed, the buyer transmits the information to the seller. There is the potential, however, for credit card account numbers to be stolen during their transmission via the Internet or from their stored location within the seller's records. This potential for the misappropriation of credit account numbers presents a significant risk of exposure to both credit card users as well as credit suppliers, who may bear the burden of false charges made with the stolen account numbers. A credit card system which provides an additional level of security to all credit card system users, and more specifically internet purchasers, is highly desirable.
The present invention decreases the exposure of credit institutions and credit card holders to unauthorized transactions. The total available credit line available for transactions is parsed into discrete units for specific types of transactions. For example, 10% of the total available credit might be designated for emergency use, while 20% might be available to online purchases, etc. Alternatively, the discrete units may be allocated to specific vendors, i.e., the local supermarket, gas station, Amazon.com, etc. Limiting the credit line and transactions in this way will hinder the illegal use of the credit account by unauthorized users. This method will facilitate the management of authorized credit card use, including use by children, and will promote responsible money management.
Alternatively, the card's discrete subsets may be allocated for particular purchases. The user will have the capability to create sub-accounts with credit limits equal to the amount of an online transaction they wish to make. When the purchase is complete, the limit of the sub-account will be exhausted and the risk of exposure to unauthorized use of the sub-account is eliminated. This embodiment will be particularly advantageous for online and telephone commerce, arenas in which many consumers are wary of credit card fraud.
Sub-accounts may also be used as a convenient alternative to traveler's checks. A card with a desired amount of credit may be obtained prior to travelling. In another embodiment, a sub-account set up for a traveller is much easier than wiring money overseas. A simple phone call to convey the sub-account number to the traveller replaces trips to particular offices (e.g., Western Union) or banks at both ends of the transaction.